Don’t Wait until Time Is Up
Lately, friends, family, and clients seem to be asking the same questions: “When should I think about estate planning? Is it actually necessary for me to have an estate plan?” As life is unpredictable, it is better to start planning sooner rather than later. In fact, upon attaining the legal age of majority in your state of residence (typically at age 18), you should begin considering some form of an estate plan. An individual’s estate planning needs, however, vary based on numerous factors, assessed generally in the timeline below.
Your 20s
Individuals in their 20s are typically focused on starting their careers, acquiring assets, and just living life—death is consequently one of the last things on their minds. In fact, many individuals in their 20s do not consider any form of an estate plan and likely do not believe they need one. While a Will or trust may not be necessary for most individuals in their 20s, “ancillary” estate planning documents, such as a power of attorney, healthcare proxy, and living will, should all be considered. These ancillary documents are also known as “living” estate planning documents because they go into effect while you are alive as soon as they are executed. These ancillary documents appoint an agent or agents to carry out your financial or health wishes, as applicable, in the event you become incapacitated, either temporarily or permanently. These documents may also assist in avoiding the need for the appointment of a guardian or conservator if you were to become incapacitated or unable to care for your own financial and/or medical affairs.
In addition to these ancillary documents, individuals in their 20s should also ensure that all of their bank accounts, brokerage accounts, retirements accounts, and life insurance policies have valid beneficiary designations. By designating a beneficiary on these accounts and policies, you not only control the disposition of your assets, but also may effectively avoid probate at death.
Of course, if you get married, divorced, remarried, have children, buy a home, and/or inherit a large sum of money in your 20s (or at any time), then estate planning becomes more crucial (as discussed in more detail below).
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